This week saw a significant development in the long-running saga that has raised emotions and tensions behind the scenes at Swansea City .

A year on from the takeover share sale that angered the club’s Supporters Trust, the fan body have now presented details of a proposition that could bring an end to the infighting that at times threatened to tear the Swans apart off the field.

It could eventually hand over around £11m to the supporters’ group, while also retaining their vote and voice on the board.

But it would also end any legal claim they have in reference to the takeover last year which they have long held issues over – as well as seeing their current 21.1% stake in the club drop to around 10.5%

The Trust will open up the decision on the potential sale to its membership following a consultation forum held at the Liberty on Thursday – but has recommended that fans accept the deal.

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Here, Chief Football Writer Chris Wathan, tries to explain the background to the developments, why the Trust are keen for the deal, and what it could mean to Swansea City.

The Swansea City Supporters Trust Chairman Phil Sumbler addressed members at a consultation forum on Thursday

HOW DID WE GET TO THIS STAGE?

The Supporters Trust wasted little time in outlining their concerns after it was revealed a ‘takeover’ deal had been all but agreed in April last year and have consistently claimed they had been unfairly kept out of the loop.

It meant that other shareholders – including chairman Huw Jenkins – were able to sell all or part of their shares in the deal with American pair Steve Kaplan and Jason Levien without the Trust being part of the negotiations should they have wanted to also sell.

The Trust also voiced concerns of the ownership structure, wanting greater assurances over their position in terms of influence and protection in the new set up.

Steve Kaplan and Jason Levien became majority shareholders last July

It led to initial tensions, something not helped by an admitted lack of communication and consultation regarding key on-the-field decisions as Swansea struggled under Francesco Guidolin and Bob Bradley.

Discussions over a way forward began – with Kaplan and Levien acknowledging supporters’ ‘legitimate dissatisfaction related to events leading up to us taking a majority stake in the club’ – and saw the Trust involved in the subsequent replacement of Bradley with Paul Clement, as well; as being kept abreast of transfer plans. There was a sense of bridges having been built after the stormy start.

However, both parties agreed to shelve talks over ownership until after Swansea successfully avoided relegation – with the results of those talks presented to fans on Thursday.

WHAT IS ON THE TABLE?

In a nutshell, an offer from the Americans to immediately buy shares from the Trust and the potential for more to follow.

The shares will be valued at the same price as in the initial takeover and would see the Trust’s stake go down to around 16%.

There would also be a commitment from Kaplan and Levien to buy a further slice of the Trust’s stake – 0.5% of the total – every year for the next five years, also at the same price but dependent on the club being in the Premier League.

Swansea City's American owners Steve Kaplan and Jason Levien front the trust at a previous meeting.

Finally there would be a ‘call’ option where there is an option – but not an obligation – for the US pair to purchase a further lump of the Trust’s shares (3%) by January 2020. If all that happens, it would see the Trust received around £11m for 10.5% of the club’s shares they currently own.

The Trust would also retain it’s voting director’s seat on the board – currently held by Stuart McDonald – as well as the additional associate director presence in the boardroom that was established last season, with Will Morris able to observe and support McDonald, although is not able to vote.

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WHAT’S IN THE SMALL PRINT?

The Trust revealed, as part of the deal, they would also be asked to consider reinvesting 20% of the money received for the shares back into the club in the event of possible future stadium expansion. They did admit that details over this have not been fleshed out at this stage and would not be a guaranteed commitment.

The Trust also confirmed that Jenkins would be involved in purchasing some of the shares, as well as Kaplan and Levien, as part of the deal – something they anticipate criticism over given the strength of feeling regarding last summer’s sale.

There would also be ‘tag-along’ and ‘drag-along’ clauses inserted into the deal, while accepting the proposal would end any legal claims of the Trust regarding last summer’s deal.

WHAT ARE ‘TAG-ALONG’ AND ‘DRAG-ALONG’ RIGHTS?

Tag-along rights are when that, if the club is sold in the future, the value of the Trust’s remaining shares has to be valued the same as the shares of all other shareholders. It means they could not be excluded from future share sales – and essentially makes sure that the scenario of last summer could not be repeated, as well as protecting the financial value of the shares.

Swansea City Football Club’s chief operating officer, Chris Pearlman, who has been cited as helping communication between the American owners and the Trust

Drag-along, however, means that the Trust could be forced into selling their shares in a future deal with little power to stop it happening. In other words, the Trust could not block a total sale if it formed part of an offer from a third party (though they could have only 10% at this stage and would be unable to prevent others selling their stakes).

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WHY DO THE TRUST WANT TO SELL SOME OF THEIR SHARES?

The Trust have always said they would be open to selling shares and have made it clear to Kaplan and Levien they would consider offers.

The Trust have in the past made offers to take their holding up to 25%, a position where they would have greater rights and protection in company law, but were unable to do so. Beneath that percentage means their actual voting influence is the same at 21.2% as it would be at 10.5%.

Fans arriving for the Premier League match at the Liberty Stadium (Image: PA)

With the recent greater communication, consultation and an ongoing watchdog role on the board (being able to see regular updates on accounts for example) there is a thought that they would be no weaker.

Plus, there has long been an awareness of the need to protect the financial value of the Trust’s shareholding, something accentuated by last summer’s deal.

Selling the shares at the price agreed last summer – which is thought to have valued the club at around £110m – will bring in money that can protect the Trust’s standing in the event of the club losing value (e.g relegation from the Premier League) or dilution of shares.

Plus, there is also the appeal of maintaining a ‘rainy day fund’ that would be able to support the club in the unwanted event of financial problems in the future.

WHAT IS DILUTION?

Dilution is what happens when extra shares are created and made available to purchase. resulting in direct investment into the club, but simultaneously resulting in shares dropping in value.

Jason Levien (second left) walks to one of the pitches at Swansea City's Fairwood training complex in Gower

For a basic example, say a company was worth £10m and you had 10% of shares worth £1m. If someone wanted to invest £10m into the same company, double the shares could be created. It means you would either have to inject money yourself to retain the same shareholding (in this case an extra £1m to keep 10%) or accept your shareholding dropping to 5%.

It is a standard vehicle for investment and opens up the possibility for more funds to be injected into the club’s finances in return for a stake, rather than buying shares from existing shareholders, as was the case in the summer.

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It is something that could well happen at Swansea amid the talk of stadium expansion. Without this deal, the Trust could have to accept a lower shareholding regardless, unless they could raise further capital. Having money in the bank allows the Trust the option to keep up its presence.

There has been talk of expanding the Liberty Stadium

WHAT IS THE LEGAL CLAIM?

Having sought expert legal advice, the Trust believe they could have a case for ‘unfair prejudice’ over last summer’s share sale, namely in the claim they were kept out of discussions.

However, accepting this deal would mean they would have to give up any plans to press ahead with it.

It has been described in the past as ‘the nuclear option’ as it would see the Trust battle with the club, potentially in the courts, and effectively end all hopes of working relationships.

A recent Supporters Trust forum

In theory, nothing would change if the Trust lost any case, although it would be extremely unlikely they would be able to have any influence even with a man on the board.

If they won the case, it would not invalidate the takeover, but it would likely see them able to force through an immediate sale of all their shares at the same price. That would, however, end any say in the running of the club with their entire stake gone.

The Trust revealed their legal advice recommended this should be a last resort if all negotiations broke down given the costs and unpredictability of court cases. However, it remains an option for members.

WHAT HAPPENS NEXT?

The final decision is down to the supporters.

Trust members – who have been e-mailed the full address made by chairman Phil Sumbler – will be now asked to vote with a postal ballot to be held within the next month. It has not been confirmed what will be on the ballot paper but it is believed that members will be presented with three options: to accept the share sale deal, to reject the deal and continue as is now, or to reject the deal and pursue legal action.

The Trust board have made a recommendation to accept the deal but it is thought feel they have a duty to members to present the legal option.

WHAT WILL IT MEAN IF THE DEAL IS ACCEPTED?

It should mean light at the end of the tunnel after a tense period and the continuation of positive steps forward in relations between the two parties in recent months. Sumbler’s address acknowledged an increased working relationship with the US owners and the hope will be that the club can move forward in a stronger position.

And Sumbler subsequently said: “A lot of hard work has gone in to get to this point. It would be nice to get this over the line as quick as we can so we can get back to concentrating on watching football.

“There are details to be clarified and this meeting is the first step of the process but we hope the focus can go back to on-field matters and the club can move forward into the new Premier League season.”